Purchase Order Receipts

All purchase order receipt transactions are processed, costed, and accounted at their latest true acquisition costs.

When the invoice isn't available, the latest acquisition costs are the purchase order price and estimated landed cost charges. However, when invoice is available, the latest acquisition costs are the invoice price and actual landed cost charges.

The inventory is valued based on the cost method of the item:

• Actual Cost and Perpetual Average Cost: Items are costed at the latest acquisition cost for the receipt.

• Standard Cost: Any difference between the acquisition cost and the standard cost is booked as purchase price variance.

• Periodic Average Cost: Acquisition cost is considered as value adjustment and added to the inventory value for the period.

Acquisition cost adjustments are propagated to issue transactions if the cost method is actual cost and propagation is enabled on the cost profile.

Acquisition Cost for Procure to Pay Cycle Events

Cost Accounting creates a separate set of transactions and distributions for each applicable event in the procure to pay cycle.

The table here lists the source documents for various events in the procure to pay cycle and the corresponding cost components and acquisition cost logic.

Source Document	Cost Components	Acquisition Cost Logic - Match to Purchase Order/Receipt
Goods Purchase Order Receipt Line	Purchase order price, Nonrecoverable Tax	Purchase order receipt is valued at purchase order price plus nonrecoverable tax
Trade Operation (estimated landed costs)	Landed cost charges	Separate acquisition cost adjustments created for each landed cost charge
Change Order (retro price adjustment)	Purchase order price, Nonrecoverable Tax	Acquisition cost adjustment created for delta retro price adjustment
Goods Invoice from Accounts Payable	IPV, TIPV, TPV, ERV	Separate acquisition cost adjustment created for each invoice with variances
Trade Operation (actual landed costs from Accounts Payable third-party invoice)	Landed cost charges	Acquisition cost adjustment created for any delta between estimated and actual landed cost charges with cost date always in open period
Canceled Invoice, Credit or Debit Memo	Purchase order price, IPV, TIPV, TPV, ERV	Acquisition cost adjustment created for each canceled invoice, credit and debit memo, where applicable
Accrual Clearing	Accrual line	Acquisition cost adjustment created by prorating total invoice costs over delivered quantity